Two undervalued car stocks for experienced investors to check out

Financial Journalist

The rational investor in me refuses to buy expensive cars. Why spend many tens of thousands of dollars on a luxury model when a cheaper one does a similar job? Or worse, borrow to buy a depreciating asset or be locked into a long-term lease.

That’s boring, I know. And unusual. Sales of luxury cars in Australia soared in 2016, up 11% in a year. We bought more German-made cars than homegrown ones for the first time that year, when our car manufacturing industry was in its dying days.

The property boom was a tailwind for car sales. Many homeowners, particularly those in Sydney or Melbourne, upgraded their car to befit their new wealth status. Debt was cheap, banks eagerly lent and spending (paper) gains in your home’s value was a national pastime.